News and information about health-related issues in Kansas

Advocate of health savings accounts to speak at Dole Institute

Author and economist John Goodman is scheduled to talk about his ideas for reforming the U.S. health care system at an appearance next week at the University of Kansas Dole Institute of Politics.

Goodman sometimes is called "the father of health savings accounts," and has a new book: "Priceless: Curing the Healthcare Crisis." He co-wrote the 1992 book "Patient Power: Solving America's Healthcare Crisis."

He also developed the Health Care Contract with America, a five-point plan for reforming health care, which has been cited by the Congressional Health Care Caucus, a study group for Republican congresspersons and members of their staffs.

Health stamps

In his new book, among other things, Goodman calls for abolishing Medicaid and moving the program's beneficiaries into private insurance plans. Medicaid enrollees, under his plan, would instead get a $2,000 per person tax credit or refund that they could apply toward the purchase of private health insurance.

He also recommends replacing much of Medicaid outpatient spending for those who are not elderly or disabled with a "health stamp" system modeled on the food stamp program. Beneficiaries would be given the stamps and allowed to spend them as they saw fit for medical care. He also favors abolishing the Children's Health Insurance Program.

The main point of his book is that the current health system has neutered the function of pricing in the health care market, thereby driving up costs. Consumers, he argues, don't pay the real costs of medicine and largely are unaware of them. Providers aren't reimbursed for their true costs but instead take whatever the insurance companies and government are willing to pay.

'Perverse incentives'

"So, the overall conclusion of the book is that when we take prices out of the system we create perverse incentives," which have led to higher costs and inefficiencies, Goodman said in an interview with KHI News Service.

Comments

These are wonderful plans - and popular wth Medicare seniors. You can keep what's left over and medical providers are glad to have a patient who doesn't involve a third party or, worse, the government.

Actually, using HSAs direct money away from "insurance" companies. They make their money by "managing" (usually poorly) your health care dollars - called "managed" care. The more "managed" (prepaid) = the more "money". Why do you think "insurance" companies have grown tremendously larger since the adoption of HMOs/PPOs?

I have many lower income patients who use HSAs and high-deductible plans that are quite content with paying less money to the middleman. Granted, their "tax savings" may be limited if their effective federal income tax rate is already "low" or zero.